Payroll, super and FBT

PAYG withholding

PAYG withholding is the system under which a payer takes tax out of certain payments before passing the rest to the recipient, then sends the withheld amount to the ATO. It applies to salary and wages, and also to some payments to contractors and directors and to payments where no ABN is quoted. The payer works out the amount from the ATO's withholding tables or calculators, reports it, and pays it on the business activity statement or an instalment activity statement, depending on the amount withheld. The worker receives credit for the withheld amount when their return is assessed. Registering for PAYG withholding is a separate step from registering for GST.

General information, not tax advice. The rules change, so check the source page above for the current position. Fedix is developed by Tax7 R&D Pty Ltd.